Where the deceased is the life assured and the policyholder, the
policy proceeds will form part of the estate (
IHTM04043) at death. The value
transferred will be the claim value (
IHTM20084) as at the date of death
subject to a possible discount (
IHTM20212) in certain circumstances to
produce the open market value (
IHTM20083) required by IHTA84/S160.
These policies should be returned in box 2 of form IHT410,
and the procedure for dealing with them is set out at
IHTM20022.
In most cases the policy will provide that the insurance
company may postpone payment until it has proof of the age of the
life assured, the death of the life assured and the title of the
claimant, i.e. usually a sight of the Grant of Probate or Letters
of Administration, or Confirmation (Scotland).
No discount from the date of death claim value should be
allowed because these formalities have to be complied with.
Inheritance Tax is payable on the open market value at that date
and the hypothetical vendor must be assumed to have obtained a
grant of representation and the death certificate.
